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Tag: FBR

FBR, Pakistan’s national tax collecting agency, plays a crucial role in the country’s economy. Pakistan Revenue is committed to providing readers with the latest updates and developments regarding FBR activities.

  • FBR, SBP to make procedure for tax payment on export of services

    FBR, SBP to make procedure for tax payment on export of services

    ISLAMABAD: The government has imposed income tax on export of services and in this regard Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) will make procedure for payment of tax.

    According to budget 2021/2022 documents, the Finance Bill 2021 proposed a new section 154A for imposition of income tax on export of services.

    The proposed new section is as follow:

    “154A. Export of Services.– (1) Every authorized dealer in foreign exchange shall, at the time of realization of foreign exchange proceeds on account of the following, deduct tax from the proceeds at the rates specified in Division IVA of Part III of the First Schedule –

    (a) exports of computer software or IT services or IT enabled services in case tax credit under section 65F is not available;

    (b) services or technical services rendered outside Pakistan or exported from Pakistan;

    (c) royalty, commission or fees derived by a resident company from a foreign enterprise in consideration for the use outside Pakistan of any patent, invention, model, design, secret process or formula or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provided to such enterprise;

    (d) construction contracts executed outside Pakistan; and

    (e) other services rendered outside Pakistan as notified by the Board from time to time;

    (2) The tax deductible under this section shall be a final tax on the income arising from the transactions referred to in this section, upon fulfilment of the following conditions –

    (a) return has been filed;

    (b) withholding tax statements for the relevant tax year have been filed; and

    (c) sales tax returns under Federal or Provincial laws have been filed, if required under the law;

    (d) no credit for foreign taxes paid shall be allowed.

    (3) The provisions of sub-section (2) shall not apply to a person who does not fulfill the specified conditions or who opts not to be subject to final taxation:

    Provided that the option shall be exercised every year at the time of filing of return under section 114.

    (4) Where a taxpayer, while explaining the nature and source of any amount, investment, money, valuable article, expenditure, referred to in section 111, takes into account any source of income which is subject to final tax in accordance with the provisions of this section, he shall not be entitled to take credit of a sum that can be reasonably attributed to the business activity or activities mentioned in sub-section (1).

    (5) The Board in consultation with State Bank of Pakistan shall prescribe mode, manner and procedure of payment of tax under this section.

    (6) The Board shall have power to include or exclude certain services for applicability of provisions of this section.”

  • FBR allowed probe foreign income beyond past five years

    FBR allowed probe foreign income beyond past five years

    ISLAMABAD: The Federal Board of Revenue (FBR) has been authorized to probe foreign income of a taxpayers beyond past five years as time limitation in this regard has been withdrawn through Finance Bill 2021.

    According to budget 2021/2022 documents, the Finance Bill 2021 proposed amendment to Section 114 of the Income Tax Ordinance, 2001.

    It is proposed amendment in sub-section (5) of Section 114, to insert new proviso, namely:–

    “Provided further that the time-limitation provided under this sub-section shall not apply if the Commissioner is satisfied on the basis of reasons to be recorded in writing that a person who failed to furnish his return has foreign income or owns foreign assets.”

  • FBR issues draft return forms for Tax Year 2021

    FBR issues draft return forms for Tax Year 2021

    ISLAMABAD: The Federal Board of Revenue (FBR) has issued draft income tax return form for Tax Year 2021 to enable tax payers to file their returns from July 01, 2021.

    The FBR issued SRO 730(I)/2021 dated June 11, 2021 to issue draft income tax return forms for salaried persons, business individuals, Association of Persons and corporate entities.

    The FBR invited comments on the draft income tax return forms within seven days from the issuance of the SRO.

    Last year the FBR had taken strict stance by not extending the last date for filing income tax returns beyond December 08, 2020 in case of salaried persons, business individuals and Association of Persons.

    Further, it had also announced that the return filing for tax year 2021 would be started from July 01, 2021.

    The last date for filing income tax returns by salaried persons, business individuals, AOPs and companies having special year is September 30. Meanwhile, the due date for filing income tax returns by corporate entities having normal fiscal year is December 31.

  • FBR grants Rs1,314 billion as exemptions, concessions in 2020/2021

    FBR grants Rs1,314 billion as exemptions, concessions in 2020/2021

    ISLAMABAD: Federal Board of Revenue (FBR) has granted an amount of Rs1,314 billion as exemptions and concessions during outgoing fiscal year 2020/2021.

    According to Economic Survey of Pakistan issued on Thursday, the cost of exemptions and concessions increased by 14.26 percent during the outgoing fiscal year when compared with Rs1,150 billion in fiscal year 2019/2020.

    According to tax expenditures details the exemptions/concession in income tax increased by 18.52 percent to Rs448 billion during fiscal year 2020/2021 as compared with Rs378 billion in the last fiscal year.

    The cost of exemptions and concessions in sales tax posted an increase of 11.58 percent to Rs578.45 billion during fiscal year 2020/2021 when compared with Rs518.81 billion in the last fiscal year.

    The exemptions and concessions in customs duty increased by 13.74 percent to Rs287.77 billion in the outgoing fiscal year 2020/2021 as compared with Rs253.11 billion in the last fiscal year.

  • FBR directs IR offices to dispose of all refund cases by July 31

    FBR directs IR offices to dispose of all refund cases by July 31

    ISLAMABAD: Federal Board of Revenue (FBR) has directed tax offices to dispose all pending refund claims by July 31, 2021.

    The FBR also facilitated exporters by enhancing risk parameters for release of sales tax refunds.

    In a letter to all chief commissioners of Inland Revenue, the FBR said that it had been decided to enhance refund risk parametric check from 12 percent to 15 percent of export value in cases of partially-integrated manufacturing concerns and commercial exporters.

    The process for the purpose is:

    That, all exporters would continue to file their refund claims through FASTER module;

    That, refund claims up to 12 percent of export value will be automatically processed by FASTER system;

    That, any amount exceeding 12 percent will be deferred and marked to the field office concerned for processing and sanctioning;

    That, field offices will thoroughly scrutinize the claim to ascertain its admissibility and genuineness;

    That, after satisfying themselves as regards the admissibility and genuineness of the refund, filed officers will sanction the refund whereby RPOs shall appear in CSTRO’s payment system in a separate especially earmarked stream;

    That, CSTRO will release payment in all genuine cases falling within the range of 12 percent to 15 percent of export value;

    That, no refund claims beyond 15 percent of export value would be sanctioned / paid under any circumstances.

    The FBR said that all cases marked to the field involving higher refund-to-export ratio, by their very nature, are to be taken as high risk cases, and put to stringent levels, of both pre and post-refund audit so as to optimally safeguard the exchequer against any undue release on this account.

    Further, the FBR directed all field formations to speedily dispose of all pending cases either accepting or rejecting the refund, but no claim, on whatever count, be kept pending beyond July 31, 2021.

  • Sales tax incentive granted on supplies by restaurants

    Sales tax incentive granted on supplies by restaurants

    ISLAMABAD: The government has announced an incentive on sales tax rate on supplies made by restaurants and eateries on account of takeaway.

    The FBR issued SRO 725(I)/2021 dated June 08, 2021 to exempt sales tax in excess of five percent chargeable on supplies made by restaurants and eateries on account of takeaway subject to the condition that no input tax shall be adjusted.

    The notification shall remain in force up to June 30, 2021.

  • Sales tax rates slashed on kerosene, light diesel

    Sales tax rates slashed on kerosene, light diesel

    ISLAMABAD: The government has announced cut in sales tax rates on kerosene oil and light diesel in order to absorb the price hike on petroleum products.

    In this regard the FBR issued SRO 726(I)/2021 on Tuesday to comply with the decision of the government for keeping the POL prices intact by absorbing a hike in prices through downward adjustment in sales tax rates.

    The sales tax rate on kerosene oil has been reduced to 10.07 percent from the previous rate of 15.44 percent. Similarly, the sales tax rate on light diesel oil has been reduced to 3.67 percent from 7.56 percent. Meanwhile, the sales tax rates on petrol and high speed oil have been kept unchanged at 17 percent.

    According to an official statement issued on May 31, 2021, the prime minister had decided to maintain the prices of petroleum products as they were on May 17, 2021.

    “The government has not increased the prices of petroleum products since April 16, 2021 by adjusting sales tax and petroleum levy so that there is no corresponding increase in the prices of essential items and maximum relief is provided to the common man.”

  • Wearing uniform made mandatory for all Customs officers

    Wearing uniform made mandatory for all Customs officers

    ISLAMABAD: The Federal Board of Revenue (FBR) has made it mandatory of wearing uniform for officials in the grades up to BS-21 of Pakistan Customs Service (PCS).

    The FBR issued SRO 722(I)/2021 on Monday to notify draft rules for making mandatory the wearing of uniform by all customs officials from July 01, 2021.

    The FBR said that the purpose of the single uniform is to enhance the espirit de corps.

    The revenue body said that there shall be service and office uniform of Charcoal Grey colour for all the officers and officials as prescribed from BS-I to BS-21, of Pakistan Customs Service.

    Uniform allowance shall be made permanent part of the salary as per admissible limits determined from time to time by the FBR.

    The FBR said that a Customs General Order (CGO) would be issued for the detailed design, description and accessories of the uniform.

    All ranks of Pakistan Customs Service whether serving in Collectorates or Directorates except FBR Headquarters, shall wear the prescribed uniform with specific formation insignia as prescribed in the CGO issued in this regard.

    “All ranks shall abide by the instructions or guidelines contained in the CGO for manners, etiquettes, appearance and official conduct whilst wearing uniform,” the FBR said.

    Any breach of the guidelines as mentioned above, respective CGO or guidance notes annexed to the CGO shall be construed as misconduct under Civil Servants (Efficiency and Discipline) Rules, 2020, and may entail disciplinary proceedings, it added.

  • FBR urged to issue FTNs against withholding tax deduction

    FBR urged to issue FTNs against withholding tax deduction

    KARACHI: Tax practitioners have urged the Federal Board of Revenue (FBR) to issue Fee Tax Numbers (FTNs) to persons who are not liable for withholding tax.

    In its proposals for budget 2021/2022, the Karachi Tax Bar Association (KTBA) said that Section 49(3) of the Income Tax Ordinance, 2001 has specified that any payment received by the Federal Government, a Provincial Government or a Local Government shall not be liable to any collection or deduction of advance tax.

    No clarification or list of FTN entities to whom this subsection applies, the tax bar said.

    In absence of any SRO or underlying Rules causes unease to the withholding agents to determine proper withholding tax treatment in such case.

    FBR should issue a separate list of Fee Tax Numbers (FTNs), who are not liable to tax withholding as provided under section 49(3) of the Ordinance through a S.R.O.

    The KTBA said that this will assist the withholding agents and save considerable time in deciding whether a respective FTN holder is required to produce exemption certificate or not.

  • FBR impounds benami luxury vehicle

    FBR impounds benami luxury vehicle

    ISLAMABAD: Anti-Benami Zone – I Islamabad of the Federal Board of Revenue (FBR) has impounded a luxury vehicle from a residential premise in the capital.

    A FBR spokesman on Friday said that it was first of its kind operation in which the anti-benami zone confiscated a luxury five-door vehicle from a residential premise in the capital.

    Initial clue to this vehicle’s benami ownership was traced from Excise Office Islamabad Capital Territory.

    The suspected benami owner was not enrolled with FBR and upon enquiry he disowned the vehicle and disclosed that he was just a driver whose CNIC was used by the beneficial owner of the vehicle.

    After completion of enquiry and investigation, a reference was filed to the Adjudicating Authority which was decided in favor of ABI.

    Whereabouts of the vehicle were traced to a house in Islamabad which was subsequently searched, and, on 2nd June 2021, the vehicle was confiscated / impounded with the help of local Law Enforcement Agencies (LEAs) under the Benami Transactions Prohibition Act 2017.

    In accordance with the directions of the Prime Minister, momentum against benami assets accelerated in June 2019 with the inception of Anti Benami Zones across Pakistan.

    Newly created zones have so far filed more than 90 references of various categories of assets including shares, bank accounts, vehicles, land etc. Among them are 33 vehicles which shall be confiscated as soon as these references attain finality under the law.